ihtjivy of €i<fnpt^^. 




UNITED STATES OF AMERICA. 



MAXIMS 



FOR THK PROMOTION OF 



THE WEALTH OF NATIONS: 



a Manual of JPoUtfcal Etonoms, 



EXTRACTED FROM THE WRITINGS OF 



FRANKLIN, JEFFERSON, MADISON, HAMILTON, 
CALHOUN, JUDGE COOPER, ADAM SMITH, 
J. BAPTISTE SAY, ANDERSON, &c. &c. 



* 

<<^''/". 



PHILADELPHIA I 

Clark <^ Raser, Printers, 33 Carter's Alley. 
Jan. 1,1830. 



PREFACE. 



In every science there are certain principles 
or maxims, which time, experience, and obser- 
vation have united to establish. When they 
refer to a practical science, they are as safe 
guides, so far as regards that particular science, 
as the maxims of morals and religion are to di- 
rect our course in the discharge of our duties 
to our Creator, to our fellow mortals, and to 
ourselves. 

On the subject of Political Economy, which, 
liberally construed, means the science of pro- 
moting the prosperity and welfare of nations, 
by the encouragement and protection of their 
industry, such maxims are to be found scatter- 
ed through the writings of various authors of 
high celebrity, and form the bases of the laws 
and ordinances of some of the wisest statesmen 
that ever presided over the destinies of nations. 
The list embraces the names of the Edwards 
of England, Frederic of Prussia, Henry of 
France — of Franklin, Jefferson, Hamilton, Ma- 
dison, Chaptal, Sec. &c. 

As regards this science there are two differ- 
ent schools, which profess doctrines diametri- 
cally opposite to each other, and are designat- 
ed by the titles of the old and the new school. 

The leading maxim of the first is, that do- 
mestic industry should be protected, in all its 



IV PREFACE. 

shapes and forms, from foreign competition, 
by protecting duties or absolute prohibitions, 
as the case may require. 

The leading maxim of the new school is, that 
nations should buy where they can buy cheap- 
est, whether abroad or at home — and that the 
duties on importations should be laid almost 
altogether with a view to the collection of re- 
venue. The grand apostle of this school is 
Adam Smith, and his great disciples are Say, 
Ricardo, Malthus, M'CuHoch, 8cc. 

The present publication contains the leading 
maxims of the old school, which, the editor be- 
lieves, if carefully studied by unbiassed minds, 
cannot fail to carry conviction with them. 
It is intended as a manual of political economy. 
The maxims have the sterling merit of being 
supported, not merely by the prosperity of 
those nations which have carried them into 
operation, but by the decay and desolation of 
those which have pursued a contrary policy. 



I shall briefly notice a few of the very extra- 
ordinary dogmas of the new school. 

Dr. Smith gravely states, that — 

"The free importation of foreign corn could very little 
affect the interest of the farmers of Great Britain! P' — 
Wealth of Nations, Vol. I. p. 323. 

Flour in Liverpool on the 8th of September, 
1829, was about eight dollars per barrel. To 
any intelligent merchant I appeal, to decide 
whether a free importation of flour or wheat 



PREFACE. V 

from the Baltic or Odessa, would not, on its 
arrival, reduce the price to six or seven dollars, 
and cripple a large proportion of those farmers 
whose resources were slender, and injure more 
or less every one concerned in raising grain. 

The next maxim goes to destroy the national 
energies in countries which have made little 
progress in arts or manufactures. Had it been 
acted upon by Great Britain, it would have re- 
tained her to this hour dependent on Flanders 
for her woollen goods, on the East Indies for 
her cottons, on France for her paper, glass, 
Sec. 8cc. 

" Whether the advantages which one country has over 
another, be natural or acquired, is in this respect of no 
consequence ! Jis long as the one country has those ad- 
vantages, and the other lonnts them, it will always he 
more advantageous for the latter to huy of the former 
than to make ! ! .'" — Idem, p. 321. 

At the close of the revolutionary war. Great 
Britain, and almost all the nations of Europe, 
had "Me advantage over ks," and could furnish 
almost every article of manufactures cheaper 
than we could make them, and therefore we 
ought, according to this refined and rational 
theory, to purchase nine-tenths of our clothing, 
furniture, and tools, from them! And some of 
them could, even at this hour, furnish us with 
grain cheaper than we can raise it— and we 
ought, according to Dr. Smith, to allow them 
to feed as well as clothe us!!! 

Dr. M'Culloch, who is one of the prime lead- 
ers of the new school in Great Britain, and on 
whom the mantle of Adam Smith has fallen, 
was examined some time since before the house 
of Commons, and diM.:lared that the incomes of 



VI PREFACE. 

Irish absentees were as truly spent in Ireland, 
as if they resided there! ! ! 

Question put to Mr. M^Culloch: — 

" Would not the expenditure of their incomes [of the 
absentees] be productive of a great deal of good ?" 

Reply. 

"TAe income of a landlord, token he is an absentee, is 
really as much expended in Ireland, as if he icere living 
in it .'!.'.'! r 

To this he added the following absurdity:-— 

" If the English land-holders had as faithful stewards 
or agents as the Scotch, it toould not injure England, if 
their incomes toere spent abroad." 



It is a singular fact, that the policy of the 
old school is powerfully and irresistibly sup- 
ported by one of the leading maxims of the 
very founder of the new school, which forms 
the first article in the following selection, but 
is here repeated, for the purpose of enabling 
the reader to compare the maxim with the 
comments offered on it — 

" Whatever tends to diminish in any country the num- 
ber of artificers and manufacturers, tends to diminish the 
home market, the most important of all markets for the 
rude produce of the land; and thereby still further to dis- 
courage agriculture. 

" Those systems, therefore, which, preferring agricul- 
ture to all other employments, in order to promote it, im- 
pose restraints upon manufactures and foreign commerce, 
act contrary to the very end they propose, and indirectly 
discourage that species of industry they mean to promote." 
—Smith's Wealth of Nations, Vol. ii. p. 149. 

These maxims are the genuine dictates of 
sound, sense. But unfortunately they cut up 
the leading theory of the Doctor's work, root 



PREFACE. Vll 

and branch. That theory, as I have ah^eady 
stated, is to leave importation free, and pur- 
chase abroad whatever can be furnished cheaper 
there than at home. I request the attention of 
the reader while I state, in a few words, the 
utter incompatibility of the two doctrines — 
previously observing that Dr. Smith holds, and 
truly holds, that agriculture is the most im- 
portant branch of human industry. 

The preceding maxims, when analysed, re- 
solve themselves into three positions: — 

1. That the home market is the best of all 
markets for the rude produce of the soil, i. e. 
for the products of agriculture. 

2. That the diminution of the number of 
artificers and manufacturers diminishes the 
home market. 

3. That this latter diminution discourages 
agriculture. 

Now as the free importation of manufactured 
goods necessarily "diminishes the number of 
artificers and manufacturers" engaged in simi- 
lar manufactures, as is admitted by the Doctor 
himself, whose words I quote, 

" If the free importation of foreign manufactures were 
permitted, several of the home manufactures would pro- 
bably suffer, and some of them perhaps go to ruin alto- 
gether, and a considerable part of the stock and industry 
employed in them would be forced to find out some other 
employment." — Vol. I. p. 321. 

it clearly follows, that if the maxims be, as they 
certainly are, correct, the theory must be radi- 
cally wrong. 

I presume the following positions will be ad- 
mitted by the most devoted admirer of Adam 
Smith's doctrines. 



via PREFACE. 

Suppose 10,00a persons are employed in any 
particular branch, the cotton, for instance«— 
that they make goods just enough to supply 
their fellow citizens— that by some new process 
similar goods can be had from abroad, at a 
lower price — that in pursuance of the maxim 
to " buy wherever goods can be had cheapest," 
an importation takes place which is equal or 
nearly so to the demand. Does it not obvious- 
ly and irresistibly follow, that this operation 
" diminishes the number of manufacturers" — 
" diminishes the home market, the most im- 
portant of all markets for the rude produce of 
the land," and thereby " discourages agricul- 
ture?"— Q. E. D. 



Want of room forbids pursuing this fertile 
topic any further: but it is presumed enough 
has been adduced to prove how extremely dan- 
gerous it is for nations to ground their policy 
on the dicta of men, however learned or cele- 
brated, whose propensity to theory induces 
them to wholly overlook facts, and to advance 
such absurd doctrines as those above quoted, 
particularly that of Dr. M'Culloch. 

HAMILTON. 
Philadelphia^ Jan. 1, 1830. 



THE 



I. " Whatever tejids to diminish in any coim- 
" try the number of artificers and manufacturers, 
"' tends to diminish the home market, the most 
" important of all markets for the rude produce 
'^ of the land; and thereby still further to dis- 
" courage agriculture.^^ ^ 

II. '• Manufacturing establishments not only 
" occasion a positive augmentation of the produce 
" and revenue of the society, but contribute essen- 
" tially to rendering them greater than they could 
*' possibly be, ivithout such establishments.^^" 

III. '^^ The substitution of foreign for domestic 
" manufactures is a transfer to foreign nations 
" of the advantages accruing from the employment 
" of machinery, in the modes in which it is capa- 
" ble of being employed, with most utility and to 
" the greatest extent."^ 

IV. Manufacturing establishments " afford oc- 
" casional and e.xtra employment to industrious 
*' individuals and families, who are willing to 
" devote the leisure resulting from the intermis- 
" sions of their ordinary pursuits, to collateral la- 
" hours, as a resource for multiplying their acqui- 

» Smith's AVealth of Nations, Vol. 1.1. //^^. 
- Hamilton's Report on Manufactures, p. "^5. 
3 Idem, 2S. 



10 THE WEALTH OF NATIONS. 

" sitions or their enjoyments. The husbandman 
" himself experiences a neiv source of profit and 
" support from the increased industry of his wife 
''and daughters; invited and stimulated by the 
" demands of the neighbouring manufactories."-* 

V. Another advantage is " the employment of 
" persons who ivould otherwise he idle, (and in 
'* many cases a burden on the community,) either 
" from the bias of temper, habit, infirmity of body, 
" or some other cause, indisposing or disqualify- 
" ing them for the toils of the country."^ 

VI. " Women and children are rendered more 
" useful, and the latter more early useful, hy ma- 
*' nufacturing establishments, than they ivould 
'^ otherwise be. Of the number of persons em ploy- 
" ed in the cotton manufactories of Great Britain, 
" it is computed that four- sevenths nearly are 
" women and children ; of whom the greatest pro- 
" portion are children, and many of them of a very 
'* tender age."^ 

VII. " When all the different kinds of indus- 
"try obtain in a community, each individual can 
'*find his proper element, and can call into acti- 
" vity the whole vigour of his nature."^ 

VIII. " The spirit of enterprise, useful and 
" prolific as it is, must necessarily be contracted 
" or expanded in proportion to the simplicity or 
"variety of the occupations and productions, 
*' which are to be found in a society. It must be 
" less in a nation of mere cultivators, than in a 
''nation of cultivators and merchants; less in a 
'' nation of cultivators and merchants, than in a 
'' nation of cultivators, artificers, and mer- 
*« chants."^ 

4 Hamilton's Report on Manufactures, p. 29. 
^Ibid. eibid. 'Idem, 32. 8idem,33. 



THE WEALTH OF NATIONS. 11 

IX. " The exertions of the husbandman will be 
' steady or fluctuating, vigorous or feeble, in pro- 
' portion to the steadiness or fluctuation, ade- 
'quateness or inadequateness of the market on 

* which he must depend, for the vent of the sur- 
'plus, which may be produced by his labour; 
'and such surplus, in the ordinary course of 
' things, will be greater or less in the same pro- 
' portion."^ 

X. " For the purpose of this vent, a domestic 
' market is greatly to be preferred to a foreign 
' one ; because it is, in the nature of things, far 
' more to be relied iipon.^^^^ 

XI. " No earthly method remains for encourag- 

* ing agriculture, where it has not reared up its 

* head, that can be considered in any way efp.ca- 
' cious, but the establishing proper manufactures 
' in those countries you wish to encoiirage.^^^^ 

XII. "If a manufacture be established in any 
' rich and fertile country, by convening a number 
' of people into one place, who must all be fed 

* ft^ //ie/flr>;t^r, without interfering with any of 
' his necessary operations, they establish a ready 
' market for the produce of his farm, and thus 
' throw money into his hands, and give spirit 
' and energy to his cidture.^^^^ 

XIII. " Insurmountable obstacles lie in the 
' way of a farmer in an unimproved country, 
' who has nothing but commerce alone to depend 
' upon for providing a market for the produce of 
'hisfarm."^^ 

XIV. " Industry in all shapes, in all instances, 
'^'and by all means should be encouraged and pro- 

9 Hamilton's Report on Manufactures, p. S3. ^^Ihid. 
11 Anderson on Industry, p. 70. 12 idem, 37. 

'•* Idem, 



12 THE WEALTH OF NATIONS. 

"tected; indolence by every possible method 
" rooted out."^* 

XV\ " Some European nations prudently refuse 
" to consume the manufactures of East India. 
" Tlie gain to the merchant is not to be compared 
" with the loss, by this means, of jiecple to the 
" nationJ^^^ 

XVI. " Foreign luxuries, and needless nianu- 
" factures, imported and used in a nation, increase 
*^' the people of the nation that furnishes them, and 
^' diminish the people of the nation that uses 
" them.:'^'^ 

XVII. '^ Laws, therefore, that prevent such 
'• importations, and, on the contrary, promote the 
"exportation of manufactures to be consumed in 
" foreign countries, may be called, (with respect 
" to the people that make them,) generative laws, 
" as, by increasing subsistence, they encourage 
" marriage.^^^'^ 

XVIII. " Such laws, likewise, strengthen a na- 
*' tion doubly, by increasing its own people, and 
*• diminishing its neighbours."^^ 

XIX. " Where a nation imposes high duties on 
"our productions, or prohibits them altogether, 
" it may be proper for us to do the same by theirs 
" — first burdening or excluding those produc- 
** tions ivhich they bring here in competition with 
** our own of the same kind; selecting next, such 
" mam factures as we take from them in greatest 
" quantity, and ivhich at the same time we could 
" the soonest furnish to ourselves, or obtain from 
" otKer countries; imposing on them duties light 

14 Franklin, iv. p. 159. i5 Idem, 188. 

16 Idem, 189. '"Ibid. is ibid. 



THE WEALTH OF NATIONS. 13 

" at first, but heavier and heavier afterwards, as 
"other channels of supply open."^'' 

XX. " Such duties, having the effect of indirect 
" encouragement to domestic manufactures of 
*' the same kind, may induce the manufacturer to 
" come himself into these states, where cheaper 
" subsistence, equal laws, and a vent for his wares, 
" free of duty, mav insure him the highest profits 
'• from his skill and industry. The oppressions 
" of our agriculture in foreign parts would thus 
*' he made the occasion of relieving it from a 
" dependence on the councils and conduct of 
" otiiers, and of promoting arts, manufactures, 
" and population at horne.^^-^ 

XXI. " The foreign demand for the products of 
"agricultural countries, is, in a great degree, 
'' rather casual and occasional, than certain or 
" constant. '^^^^^ 

XXII. " There are natural causes tending to 
'^ render the external demand for the surplus of 
" agricultural nations a precarious reliance. The 
" differences of seasons, in the countries which 
"are the consumers, make immense differences 
"in the produce of their own soils, in different 
** years ; and consequently in the degrees of their 
" necessity for foreign supply. Plentiful harvests 
" with them, especially if similar ones occur at 
" the same time in the countries which are the 
" furnishers, occasion of course a glut in tlic 
" markets of the latter."-^ 

XXIII. " There appear strong reasons to 

19 Jefferson's Report on the Privlleg"es and Restric- 
tions of the Commerce of the United States in Foreign 
Countries. 20 ibid. 

21 Hamilton's Report on Manufactures, p. 34. 

"Idem, "5. 



14 THE WEALTH OF NATIONS. 

** regard the foreign demand for our surplus pro- 
" duce as too uncertain a reliance, and to desire 
" a substitute for it, in an extensive domestic 
« market."^'' 

XXIV. " Manufacturers, who constitute the 
'• most numerous class, after the cultivators of 
" land, are for that reason the principal consu- 
*' mers of the surplus of their labour.""^* 

XXV. "This idea of an extensive domestic 
'' market for tlie surplus produce of the soil is of 
" the first consequence. It is, of all things, that 
" which most effectually conduces to a flourishing 
" state of agriculture."^^ 

XXVI. " The multiplication of manufactories 
" not only furnishes a market for those articles 
*' which have been accustomed to be produced in 
" abundance, in a country ; but likewise creates 
^' a demand for such as were either unknown or 
«' produced in inconsiderable quantities.*''"^ 

XXVII. " It is the interest of nations to di- 
" versify the industrious pursuits of the individu- 
*' als who compose them."-'' 

XXVIII. '• The establishment of manufactures 
" is calculated not only to increase the general 
" stock of useful and productive labour ; but even 
" to improve the state of agriculture in particu- 
" lar : certainly to advance the interests of those 
" who are enjrafred in it."^^ 

XXIX. "If the system of perfect liberty to in- 
" dustry and commerce were the prevailing sys- 
" tern of nations, the arguments which dissuade 
" a country in the predicament of the United 
" States, from the zealous pursuit of manufac- 
"tures would doubtless have great force. But 

23 HamlUon's Report on Manufactures, p. 35. 

2^ Ibid. 25 Ibid. 26 Idem, 36. 2t jbid. 2^ ibid. 



THE WEALTH OF NATIONS. 15 

" this system is far from characterising the gene- 
" ral policy of nations. The prevalent one has 
" been regulated by an opposite spirit. The con- 
" sequence of it is, that the United States are, to 
" a certain extent, in the situation of a country 
" precluded from foreign commerceP'^^ 

XXX. " The United States can, indeed, with- 
" out difficulty, obtain from abroad the manufac- 
" tured supplies, of which they are in want; but 
" they experience numerous and very injurious 
" impediments to the emission and vent of their 
*' oivn commodities.'^^^^ 

XXXI. "A constant and increasing necessity, 
" on their part, for the commodities of Europe, 
"and only a partial and occasional demand for 
"their own, in return, could not but expose them 
" to a state of impoverishment, compared with 
" the opulence to which their political and natural 
"advantages authorize them to aspire."^'^ 

XXXII. " If Europe will not take from us the 
" products of our soil, upon terms consistent 
" with our interest, the natural remedy is to con- 
" tract, as fast as possible, our tvants of her. ^^^^ 

XXXIII. " To maintain between the recent 
" establishments of one country, and the long 
" matured establishments of another country, a 
" competition upon equal terms, both as to qua- 
"lity and price, is in most cases impracticable. 
" The disparity, in the one, or in the other, or in 
" both, must necessarily be so considerable as to 
^'forbid a successful rivalship, ivithout the extra- 
'' ordinary aid and protection of government, ^^^^ 

XXXIV. " The undertakers of a new manu- 
" facture have to contend not only with the natu- 

29 Hamillon's Report on Manufactures, p. 38, 

30 Idem, 39. 3i Jbid. 32 ijetn, 40. 33 idem, 43. 



16 THE WEALTH OF NATIONS. 

" ral disadvantages of a new undertaking, but with 
" the gratuities and remunerations which other 
" governments bestow. To he enabled to contend 
" with success, it is evident, that the interference 
" and aid of their own government are indispen' 
" sable.'''* 

XXXV. " Combinations by those engaged in a 
** particular branch of business in one country, to 
" frustrate the first eftbrts to introduce it into 
" another, by temporary sacrifices, recompensed 
" perhaps by extraordinary indemnifications of 
" the government of such country, are believed to 
" have existed, and are not to be regarded as des- 
" titute of probability."^^ 

XXXVI. " As soon as the United States shall 
" present the countenance of a serious prosecutlo^i 
" of manufactures, as soon as foreign artists shall 
" be made sensible that the state of things here 
" affords a moral certainty of employment and 
" enco\.\r2t.gemeui, competent numbers of European 
" workmen will transplant themselves, effectually 
" to ensure the success of the design.'''^^ 

XXXVII. " It is not an unreasonable supposi- 
" tion that measures, which serve to abridge the 
''free competition of foreign articles, have a ten- 
" dency to occasion an enhancement of prices : 
" and it is not to be denied that such is the effect 
" in a number of cases ; but tlie fact does not uni- 
" formly correspond with the theory. A reduction 
" of prices has, in several instances, immediately 
"succeeded the establishment of a domestic ma- 
'* nufacture."^^ 

XXXVIII. Though it were true, that the im- 
" mediate and certain effect of regulations con- 

3-1 Hamilton's Report on Manufactures, p. 44. 
3"^ Ibid. 36 Idem, 4t5, 3: xdem, 66. 



THE WEALTH OF NATIONS. 17 

" trolling the competition of foreign with domestic 
" fabrics was an increase of price, it is universally 
"true, that the contrary is the ultimate effect 
"with every successful manufacture. TVhen a 
*' domestic manufacture has attained to perfec- 
" tion, and has engaged in the prosecution of it a 
" competent number of persons, it invariably be- 
" comes cheaper. Being free from the heavy 
*' charges which attend the importation of foreign 
" commodities, it can be afforded, and accordingly 
" seldom or never fails to be sold cheaper, in 
" process of time, than was the foreign article for 
" which it is a substitute. The internal competi- 
" tion, ivhich takes place, soon does away every 
'' thing like monopoly, and by degrees reduces the 
''price of the article to the minimum of a rea- 
" sonable profit on the capital employed. This 
" accords with the reason of the thing, and with 
" experience.^^'-^^ 

XXXIX. AVhence it follows, that it is the inte- 
" rest of a community, with a view to eventual 
''and permanent economy, to encourage the 
^^ growth of manufactures. In a national vieiv, a 
" temporary enhancement of price must always be 
*• luell compensated by a permanent reductio7i of 

XL. " The trade of a country which is both 
" manufacturing and agricultural, will be more 
" lucrative and prosperous, than that of a country, 
"which is merely agricultural. "*° 

XLI. " While the necessities of nations exclu- 
"sively devoted to agriculture, for the fabrics 
" of manufacturing states, are constant and regu- 
"lar, the wants of the latter for the products of 

3s Hamilton's Report on Manufactures, p. 66. 
39 Idem, 67. 40 ibid. 



18 THE WEALTH OF NATIONS. 

" the former, are liable to very considerable flue- 
" tuations and interruptions. The great inequali- 
*• ties resultincr from ditferences of seasons, have 
" been elsewhere remarked ; this uniformity of 
"demand on one side, and unsteadiness of it, on 
" the other, must necessarily have a tendency to 
" cause the general course of the exchange of 
" commodities between the parties, to turn to the 
" disadvantage ofthe merely agricultural states."-'^ 
XLII. " From these circumstances collectively, 
" two important inferences are to be drawn ; I. 
" That there is always a higher probability of a 
" favourable balance of trade, in regard to coun- 
" tries, in which manufactures, founded on the 
*' basis of a thriving agriculture, flourish, than in 
" regard to those, which are confined wholly or 
" almost wholly to agriculture ; II. (which is also 
*' a consequence of the first,) that countries ofthe 
" former description are likely to possess more 
*• pecuniary wealth, or money, than those of the 
" latter."^2 

XLIII. " The importations of manufactured 
" supplies seem invariably to drain the merely 
" agricultural people of their wealth. Let the 
'' situation of the manufacturing countries of 
" Europe be compared in this particular, with that 
'• of countries which only cultivate, and the dispa- 
" rity will be striking."^^ 

XLIV. " The West India Islands, the soils of 
"which are the most fertile; and the nation, 
'' which in the greatest degree supplies the rest 
" ofthe world, with the precious metals; exchange 
" to a loss with almost every other country."^* 

XLV. " The uniform appearance of an abun- 

41 Hamilton's Report on Manufactures, p. 68, 

42 Idem, rO. "13 Ibid. « ibid. 



THE WEALTH OF NATIONS. 19 

" (lance of specie, as the concomitant of a flou- 
" rishing state of manufactures, and of the reverse, 
" where they do not prevail, afford a strong pre- 
" sumption of their favourable operation upon the 
" wealth of a country.""*^ 

XLVI. " Not only the wealth, but the inde- 
" pendence and security of a country, appear to 
" be materially connected with the prosperity of 
" manufactures. Every nation, with a view to 
" those great objects, ought to endeavour to possess 
" within itself* all the essentials of national sup- 
" ply. These comprise the means of subsistence, 
"habitation, clothing, and defence."*'* 

XLVII. " The extreme embarrassments of the 
" United States during the late war, from an in- 
" capacity of supplying themselves, are still 
" matter of keen recollection ; a future war might 
" be expected again to exemplify the mischiefs 
<* and dangers of a situation, to which that inca- 
" pacity is still in too great a degree applicable, 
" unless changed by timely and vigorous ex- 
" ertion."*^ 

XLVIII. " The aggregate prosperity of manu- 
" factures, and the aggregate prosperity of agri- 
'* culture are intimately connected."'^* 

XLIX. "The superior steadiness of the de- 
"mand of a domestic market for the surplus 
" produce of the soil, is alone a convincing argu° 
" ment of the truth of this maxim."*^ 

L. " The legislator, who makes effectual laws 
*• for the promoting of trade, increasing einploy- 
" ment, improving land by more or better tillage, 
" providing more food by fisheries, securing 
" property, &c. and the man v/ho invents new 

4^ Hamilton's Report on Manufactures, p. 71. 

4*5 Ibid. *7 Idem, 72. is Idem, 75. '-^ Ibid. 



20 THE WEALTH OF NATIONS. 

" trades, arts, or manufactures, or new improve- 
" ments in husbandry, may be properly called 
^'fathers of their nation^ as they are the cause of 
" the generation of multitudes, by the encourage- 
" ment they afford to marriage.^'^° 

LI. " As in most countries, domestic supplies 
'* maintain a very considerable competition with 
" such foreign productions of the soil, as are im- 
" ported for sale; if the extensive establishment 
" of manufactories in the United States does not 
'^ create a similar competition in respect to ma- 
"nufactured articles, it appears to be clearly 
'' deducible, from the considerations which have 
" been mentioned, that they must sustain a double 
"loss in their exchanges with foreign nations; 
" strongly conducive to an unfavourable balance 
*'of trade, and very prejudicial to their inte- 
" rests."^^ 

LII. "The encouragement of manufactures is 
" the interest of all parts of the Union. If the 
" northern and middle states should be the princi- 
" pal scenes of such establishments, they would 
" immediately benefit the more southern, by creat- 
" ing a demand for productions, some of which 
" they have in common ivith the other states, and 
" others of which are either peculiar to them, or 
'* more abundant, or of better quality, than else- 
" where. These productions, principally, are tim- 
" ber, flax, hemp, cotton, wool, raw silk, indigo, 
" iron, lead, furs, hides, skins, and coals; of these 
'' articles cotton and indigo are peculiar to the 
" southern states; as are hitherto lead and coal."^^ 

LIII. "The effect of multiplying the opportu- 

60 Franklin, iv. 188. 

51 Hamilton's Report on Manufactures, p. 73. 

52 Idem, 76. 



THE WEALTH OF NATIONS. 21 

' nities of employment to those who immigrate, 
' may be an increase of the number and extent of 
' valuable acquisitions to the popiilationt arts, 

• and industry of the country.*'''^^ 

LIV. " Considering a monopoly of the domes- 
Hie market to its own manufacturers as the 

• reigning policy of manufacturing nations, a 
' similar policy on the part of the IJnited States, 
' in every proper instance^ is dictated, it might 
' almost be said, by the principles of distributive 
^justice; certainly by the duty of endeavouring 
' to secure to their own citizens a reciprocity of 
' advantages."^* 

LV. " There is no purpose to which public 

• money can be more beneficially applied, than 
' to the acquisition of a new and usefid branch 

• of industry; no consideration more valuable 

• than a permanent addition to the general stock 

• of productive labour."^^ 

LVI. " Those manufactures always deserve to 
'be most cherished, which aftbrd the prospect of 

• a constant and steady demand : for if this de- 
' mand shall be apt to vary, the poor operators 
'will be often thrown idle; which is always 

• attended with the most distressful consequences 

• to society. But things which minister imme- 
' diately to the real wants and necessities of 
' mankind, have a prospect of being more con- 
' stantly called for, than those that only furnish 
'food for luxury and dissipation: for as luxury 
' is ruled by fashion and caprice, it may demand 

" with the most unreasonable avidity to-day, what 
" it shall neglect and contemn to-morrow,"^'^ 

S3 Hamilton's Report on Manufactures, p. 78. 

s* Idem, 80. 55 ibid. 

^'^' Anderson on National Industry, p. 57. 



22 THE WEALTH OF NATIONS. 

LVII. " The importer of foreign fineries finds 
^* it greatly for his own profit to encourage a 
" spirit of dissipation and extravagance among 
*' all ranks of people: for he not only reaps profits 
** on them in the mean time, but he knows, that 
*• ivhai were accounted mere superfiiiities at first, 
" soon become necessaries of life, so that his trade 
** will increase with the increasing demand for 
" them. It is his interest, therefore, and will be 
" his study, to promote, as far as he can, that 
" general spirit of extravagance and dissipation, 
" which is the most effectual bar to sober industry, 
"and the most certain means of destroying the 
" internal felicity of every individual of the state. 
" In consequence of this system, the people soon 
" become poor, and the profits of the dealer in- 
'• crease with their poverty."^^ 

LVIII. " Those who wish to make agriculture 
" flourish in any country can have no hope of suc- 
" ceeding, but by bringing commerce and manu- 
" factures to her aid, which, by taking from the 
"farmer his superfluous produce, gives spirit to 
"his operations, and life and activity to his 
" mind."^^ 

LIX. "Except the simple and ordinary kindsof 
" household manufiictures, or those for which there 
" are very commanding local advantages, pecuni- 
"ary bounties are in most cases indispensable 
" to' the introduction of a new branch. »^ stimu- 
" lus and a support not less powerful and direct, 
" is, generally speaking, essential to the overcom- 
'' ing of the obstacles which arise from the com- 
" petitions of superior skill and maturity else- 
" ivhere. Bounties are especially essential, in re- 

■' Anderson on National Industry, p. 34. ^s idem, 61. 



THE WEALTH OF NATIONS. 23 

" gard to articles, upon which those foreigners 
*' who have been accustomed to supply a coun- 
" try, are in the practice of granting them."^^ 

LX. " It is the interest of the society in such 
*^ case to submit to a temporary expense, which 
" is more than compensated by an increase of 
" industry and wealth ; by an augmentation of 
" resources and independence ; and by the cir- 
" cum stance o^ eventual cheapness, which has been 
" noticed in another place. "^"^ 

LXI. " The policy of the exemption of the ma- 
" terials of manufactures from duty as a general 
" rule, particularly in reference to new establish- 
" ments, is obvious. It can hardly ever be advi- 
" sable to add the obstructions of fiscal burdens 
" to the difficulties which naturally embarrass a 
" new manufacture.'"^^ 

LXII. " An exclusive possession of the home 
" market ought to be secured to the domestic ma- 
" nufacturers of ardent spirits and malt liquors, as 
" fast as circumstances will admit. Nothing is 
" more practicable, and nothing moredesirable."^^ 

LXIII. " There is no truth which may be more 
" firmly relied upon, than that the interests of the 
" revenue are promoted, by ivhatever promotes an 
" increase of national industry and iveallh. In 
" proportion to the degree of these, is the capacity 
" of every country to contribute to the public 
"treasury; and where the capacity to pay is 
"increased, or even is not decreased, the only 
" consequence of measures, which diminish any 
" particular resource, is a change of the object. "^"^ 

LXIV. " In a community situated like that of 
" the United States, the public purse must supply 

59 Hamilton's Report on Manufactures, p. 84. 

«o Idem, 85. c Idem, 88. 62idem, 108. 63iciem,12o. 



^4 THE WEALTH OF NATIONS. 

" the deficiency of private resource. In what can 
" it be so useful as in promoting and improving 
" the efforts of industry ?"^* 

LXV. "In the beginning of any new manufac- 
'Hure^supjiort is always necessary, even where 
"materials can be had at the lowest price; be- 
" cause the operators must always be awkward, 
"and their wages high, with other troublesome 
"circumstances too tedious to enumerate, which 
" gradually disappear after the manufacture has 
^'been established for some time."^^ 

LXVI. " Let us not therefore deceive ourselves 
" by false appearances. Ji nation may carry on a 
" gainful trade, while its strength and vigour are 
" declining. Its merchants may be enriched, 
" while the state becomes nerveless and ex- 
"haustcd.-'^^ 

LXVII. " To aim at separating theinterest of 
^^ mam factures from that of agriculture, is like 
^' endeavouring to separate the shadow from its 
" substance ; and every attempt to do this, as it is 
*•' at the same time foolish and unjust, must end 
"in the disappointment of its projector, and prove 
" detrinieutal to the interests of those very personff 
" it was most intended to serve.^^^' 

. LXVIII. " A sound legislation on the subject 
"of duties on imports, is the true safeguard of 
" agriculturcd and manufacturing industry. It 
"raises or diminishes the duties according to 
" circumstances and the necessity of the case. It 
*' countervails the disadvantages under which our 
"manufacturers labour, from the difference of 
" the price of workmanship or fuel. IT SHIELDS 

64 Hamilton's Report on Manufactures, p. 130. 
63 Anderson on National Industry, p. 227. 
6C Idem, 288. ev idem, 305. 



THE WEALTH OF NATIONS. 25 

« THE RISING ARTS BY PROHIBITIONS, 

" thus preserving them from the rivalship of 
« foreigners, till they have arrived at complete 
" perfection. It tends to establish the national 
" independence, and enriches the country by 
" useful labour, which, as I have repeatedly 
"said, is the principal source of wealth."^^ 

LXIX. "OUR AGRICULTURISTS WANT 
« A HOME MARKET. MANUFACTURES 
" WOULD SUPPLY IT. AGRICULTURE, 
"AT GREAT DISTANCES FROM SEA- 
"PORTS, LANGUISHES FOR WANT OF 
" THIS. Great Britain exhibits an instance of 
" unexampled power and wealth by means of 
" an agriculture greatly dependent on a sys- 
" tern of manufactures — and her agriculture, 
" thus situated, is the best in the world, though 
" still capable of great improvement.'"^^ 

LXX. " We are too much dependent upon 
" Great Britain for articles that habit has con- 
" verted into necessaries. A state of war de- 
" ma^nds privations that a large portion of our 
" citizens reluctantly submit to. HOME MA- 
« NUFACTURES WOULD GREATLY LES- 
" SEN THE EVIL."7« 

LcXXI. " By means of debts incurred forfo- 
" reign manufactures, we are almost again be- 
" come colonists' — we are too much under the in- 
"Jluence, indirectly, of British merchants and 
" British agents. We are not an independent 
" people. — Manufactures among us would tend 

68 Chaptal sur I'lnclustrie Francoise, Vol. II. page 417. 

69 Principles of Political Economy, by Thomas Cooper, 
M. D., President of Columbia College, S. C, formerly 
Judge of the Supreme Court of the State of Pennsylvania. 
Published in March, 1813. 'o Idem. 

4 



26 THE WEALTH OF NATIONS. 

*'to correct this, and give a stronger tone of 
•* nationality at home."'^ 

LXXII. " The state of agriculture would im- 
" prove with th^ improvement of manufactures, 
" by means of the general spirit of energy and 
" exertion, which no where exists in so high a 
"degree as in a manufacturing country; and 
" by the general improvement of machinery, 
" and the demand for raw materials.'"'^ 

LXXIII. " The introduction of manufactures 
"would extend knowledge of all kinds, particu- 
" larly scientifical. The elements of natural 
" philosophy and of chemistry, now form an in- 
•* dispensable branch of education among the 
" manufacturers of England. They cannot get 
« on without it.^^^* 

LXXIV. " The home trade, consisting in the 
" exchange of agricultural surpluses for articles 
" of manufacture, produced in our own country, 
" will, for a long time to come, furnish the safest 
** and the least dangerous — the least expensive and 
" the least immoral — the most productive and the 
" most patriotic employment of surplus capital, 
" however raised and accumulated. The safest, 
" because it requires no navies exclusively for 
"its protection; the least dangerous, because 
•♦ it furnishes no excitement to the prevailing 
" madness of commercial wars; the least expen- 
*^ sive, for the same reason that it is the safest 
"and the least dangerous; the \edst immoral, 
"because it furnishes no temptation to the 
" breach or evasion of tlie laws ; to the multi- 
" plication of oatiis and perjuries; and to the 

71 Idem. " Idem. " Idem. 



THE WEALTH OF NATIONS, 27 

*« consequent prostration of all religious feeling, 
«' and all social duty: the most productive, he- 
" cause the cajrital admits of quicker returns; 
** because the ivhole of the capital is permanently 
<* invested and emplaned at home; because it con- 
♦« tributes, directly, immediately, and wholly, to 
*' the internal wealth and resources of the nation; 
«« because the credits given, are more easily 
«' watched, and more effectually protected by 
«♦ our own laws, well known, easily resorted to, 
«* and speedily executed, than if exposed in dis- 
«*tant and in foreign countries, controlled by 
*' foreign laws and foreign customs, and at the 
«« mercy of foreign agents; the most patriotic, 
«* because it binds the persons employed in it, by 
« all the ties of habit and of interest to their own 
« country; while FOREIGN TRADE TENDS 
"TO DENATIONALIZE THE AFFEC- 
"TIONS OF THOSE WHOSE PROPERTY 
"IS DISPERSED IN FOREIGN COUN- 
" TRIES, whose interests are connected with 
*' foreign interests, whose capital is but partially 
« inveSed at the place of their domicll, and who 
*' can remove with comparative facility from one 
" country to another. The wise man observed 
" of old, that 'where the treasure is, there will 
« the heart be also.' "^^ 

LXXV. " JS^or can there be any fear that for 
« a century to come, there ivill not be full demand 
- « produced by a system of home manufacture, for 
" every particle of surplus jiroduce that agricul- 
" ture can supply. Of all the occupations which 
« may be employed in furnishing articles either 
« of immediate necessity, of reasonable want, or 

74 Idem. 



28 THE WEALTH OF NATIONS. 

" of direct connexion with agriculture, we have 
"in abundance the raw materials of manufac- 
"ture; and the raw material, uninstructed 
" man, to manufacture them. Is it to be pre- 
" tended that these occupations, when fully 
" under way at home, will not furnish a market 
" for the superfluous produce of agriculture, 
" provided that produce be, as it necessarily 
" will be, suited to the demand ? Or ought this 
" variety of occupation, and above all, the mass 
" of real knowledge it implies, to be renounced 
" and neglected for the sake of foreign com- 
" merce — that we may not interfere with the 
" profits and connexions of the merchants who 
" reside among us; and that we may be taxed, 
" and tolerated, and licensed, to fetch from 
" abroad, what we can, with moderate exertion, 
" supply at home? And yet this is the doctrine, 
" not merely advocated and recommended 
" among us, but likely to become the fashiona- 
" ble creed of political economy, wherever mer- 
" cantile interests and connexions prevail. It 
" appears to me of national importance to coun- 
" teract these notions."'^ 

LXXVI. " The security of a country mainly 
" depends on its spirit and its means ; and the 
" latter principally on its monied resources. 
" Modified as the industry of this country now 
" is, combined with our peculiar situation and 
" want of a naval ascendency, whenever ive have 
" the misfortune to be involved in a war with a 
" nation dominant on the ocean, and it is almost 
" only ivith such we can at present be, the monied 
" resources of the country, to a great extent, must 

'5 Idem. 



THE WEALTH OF NATIONS. 29 

"fail. It is the duty of Congress to adopt those 
" measures of prudent foresight, which the 
" events of war make necessary."76 

LXXVII. " Commerce and agriculture, till 
"lately, almost the only, still constitute the 
" principal sources of our wealth. So long as 
" these remain uninterrupted, the country pros- 
" pers: but war, as we are now circumstanced, 
" is equally destructive to both. They both de- 
" pend on foreign markets; and our country is 
" placed, as it regards them, in a situation 
" strictly insular. A wide ocean rolls between 
" us and our markets. Our commerce neither 
" is nor can be protected by the present means 
" of the country. What, then, are the effects 
"of a war with a maritime power — with Eng- 
" gland ? Our commerce annihilated, spreading 
" individual misery, and producing national po- 
" verty ; our agriculture cut off from its accus- 
" tomed markets, the surplus product of the 
" farmer perishes on his hands; and he ceases to 
"produce, because he cannot sell. His resources 
" are dried up, while his expenses are greatly 
"increased; as all manufactured articles, the 
" necessaries as well as the conveniences of 
" life, rise to an extravagant price."'^ 

LXXVIII. "No country ought to be depend- 
" ent on another for its means of defence; at 
" least, our musket and bayonet, our cannon and 
" ball, ought to be domestic manufacture. But 
" what is more necessary to the defence of a. 
" country than its currency and finance? Cir- 

■^6 speech of Mr. Calhoun, formerly Representative 
from the State of S. Carolina, now Vice President of the 
United States, in favour of the mininum duty on Cot- 
tons, delivered April, 1816. "' Idem. 



30 THE WEALTH OF NATIONS. 

" cumstanced as our country is, can these stand 
"the shock of war? Behold the effect of the 
" late war on them ! tVlien our manufactures 
«* are grown to a certain verfedion, as theij soon 
"ivill, UNDER THE 'fostering CARE 
« OF GOVERNMENT, we will no longer ex- 
*' perience those evils. The farmer will find a 
"ready market for his surplus produce; and, 
** what is almost of equal consequence, a ter- 
" tain and cheap supply of all his wants. His 
" prosperity will diffuse itself to every class in 
"the community; and instead of that languor 
"of industry and individual distress now inci- 
" dent to a state of war and suspended com- 
" merce, the wealth and vigour of the commu- 
" nity will not be materially impaired. The 
" arm of government will be nerved. Taxes, in 
" the hour of danger, when essential to the inde- 
" pendence of the nation, may be greatly in- 
" creased. Loans, so uncertain, and hazardous, 
" may be less relied on; thus situated, the storm 
" may beat without, but within all will be quiet 
" and safey^^ 

LXXIX. " However prosperous our situation 
" when at peace, with uninterrupted commerce, 
" and nothing then could exceed it; the moment 
" that we are involved in war, the whole is re- 
" versed. JVlien resources are most needed; when 
" indispensable to maintain the honour; yes, the 
" very existence of the nation, then they desert us. 
"Our currency is also sure to experience the 
"shock; and' becomes so deranged as to pre- 
" vent us from calling out fairly whatever of 
" means is left to the country. The result of a 

"^^ Idem. 



THE WEALTH OF NATIONS. 31 

" war, in the present state of our naval power, 
" is the blockade of our coast, and consequent 
"destruction of our trade. The wants and 
" habits of the country, founded on the use of 
" foreign articles, must be gratified. Iniporta- 
" tion to a certain extent continues, through the 
" policy of the enemy, or unlawful traffic. The 
" exportation of our bulky articles is prevented : 
" the specie of the country is drawn otf to pay 
" the balance perpetually accumulating against 
"us: and the final result is the total derange- 
" ment of our currency."''^ 

LXXX. "MANUFACTURES PRODUCE 
" AN INTEREST STRICTLY AMERICAN, 
"AS MUCH SO AS AGRICULTURE. In 
" this they have the decided advantage of com- 
" merce or navigation ; and the country will de- 
" rive from it much advantage. Again; it is cal- 
" culated to bind together more closely our 
" widely spread republic. It will greatly in- 
«* crease our mutual dependence and inter- 
" course: and will, as a necessarv consequence, 
"EXCITE AN INCREASED ATTENTION 
"TO INTERNAL IMPROVEMENT, a sub- 
**ject every way so intimately connected with the 
" ultimate attainment of national strength, and 
" the perfection of our political institutions.''^^^ 

LXXXI. " We have a decided superiority in 
"the raw materials of cotton, hemp, and flax; 
" in our alkalies for glassworks; in the hides 
"and the tanning materials of the leather ma- 
"nufactory: and we can easily procure that 
"advantage, so far at least, as our own con- 
" sumption requires it, in the woollen nmnufac- 

"9 Idem. ?o Idem. 



32 THE WEALTH OF NATIONS. 

" tory. other branches might be enumerated 
" wherein our advantages of internal resource 
"are undeniable; but I cannot see why we 
" should neglect or despise these. JVothing but 
" a stimulus is wanted to induce and enable us 
" to make a proper usie of our domestic riches, 
" But men of skill atid men of capital fear to 
"begin; lest, ON THE RETURN OF PEACE, 
"THEY SHOULD BE EXPOSED, IN THE 
" WEAKNESS AND INFANCY OF THEIR 
" UNDERTAKINGS, TO CONTEND WITH 
" THE OVERWHELMING CAPITAL AND 
« SKILL OF THE EUROPEAN POWERS, 
"PARTICULARLY OF GREAT BRI- 
" TAIN.5'«^ 

LXXXII. "A PRODUCTIVE EST ABLIS H - 
"MENT ON A LARGE SCALE IS SURE 
"TO ANIMATE THE INDUSTRY OF A 
"WHOLE NEIGHBOURHOOD."^^ 

LXXXIII. " There are many of the provinces 
" of France that are miserable enough at the 
" present; yet want nothing but towns to bring 
"them into high cultivation: their situation 
" ivould indeed be hopeless, were ive to adopt that 
" class of economists which RECOMMENDS 
"THE PURCHASING OF MANUFAC- 
"TURES FROM FOREIGN COUNTRIES, 
"WITH THE RAW PRODUCE OF DO- 
" MESTIC AGRICULTURE."^^ 

81 Judge Cooper's Essay on Political Economy, pub- 
lished in 1813, during the war — and this passage was 
prophetic of the fate of the manufacturers after the war. 

82 Say's Political Economy. 
S3 Idem. 



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